March 13, 2007

I have often reiterated that two things – People and Process – matter the most in any company or organization. Everything else comes to a naught if these 2Ps have severe defects. Some incidents over the last few days have further reinforced my belief in the importance of these 2Ps. I have come to a conclusion that organizations can never ever grow up if they don’t first fix their 2Ps right.

Here are two incidents worth mentioning. An official circular floats in an organization whereby it is notified that with immediate effect a very routine work done at the bottom of organizational hierarchy will have to be approved by the divisional head, who is someone just one rug below the CEO! I tried hard but could not find a single reason to justify this decision, which, I must dare say, is nothing less that moronic. It is centralization at its zenith. Finding it hard to justify this decision, I, instead, tried to find out what prompted such an unwise decision. The answer was not hard to find – both critical Ps had defects. People who were supposed to be doing this routine work were not good enough to be trusted for this work even by the person who appointed them! Process of doing this routine work had many bottle-necks which not only unnecessarily delayed the work but also created hurdles in the path of finishing that work in the most optimal way.

Instead of trying to find the root cause of the problem and streamline the people and the process issues once and for all, the wise men treated themselves with a short-sighted solution. Will this solve the problem? I can bet it will not. It will make it worse. Because even the divisional head will have to rely on the judgment and opinion of the same people who were doing this work before. You can’t expect a divisional head to go to 30 places all over India every month and see with his own eyes before approving something. So, same thing would be done, but in more time due to unnecessary extension of the loop. Don’t you think it would have been better to put a competent person at the level where this work is done, give him proper authority to take decisions, make him accountable for his decisions, and do away with multiple approval channels? Why the hell something as simple as classifying stock as saleable and non-saleable has to go all the way up to the divisional head’s desk? It tells a lot about your people, processes, and the level of inefficiency at which you operate!

Second incident is equally bizarre. A company spends a lot of money on making promotional and POP display kind of stuff. A good part of it gathers dust in the warehouse without seeing sunshine for months, even years! Even the event for which something was specially made passes, but the packets remain unopened! You must be scratching your head in disbelief. Even I was until I saw it all with my very own eyes! With a little probing, this esoteric phenomenon unfolded itself to reveal that again one of the 2Ps needed serious overhauling. This time it was process. The entire process of giving orders to suppliers, receiving ordered goods at central warehouse, entering dispatch orders for dispatch of goods from central warehouse to various locations across India, and intimation of the arrival of goods to the concerned official at various locations was designed to create serious bottle-necks resulting in process inefficiencies, at times even complete break down, at various stages resulting in utter chaos, confusion, and wastage of resources.

As a result of serendipitous exposures to such incidents, I am slowly acquiring the habit of making these 2Ps – People and Processes – the starting point of analysis for most of the organizational and business problems. And trust me, 90% of the times, the root of the problem lies in fault-lines present in these 2Ps, and the solution lies in making these 2Ps defect-free.

1 comments

Those 2 Ps are a terrific starting point - at our firm (MVI, retail research company based in the USA www.mvi-insights.com) we diagnose retailer's inability to take strategy and convert it into execution (among other things).

People and process are two of the key stumbling blocks - the other two worth mentioning in this same context - a) technology - remarkable how often a strategy is not supported by the underlying information architecture b) measures - the biggest single stumbling block we see when great strategy gets poorly executed - what people are actually measured to do is inconsistent with the broader objective.